Given the fact that Wal-Mart’s customers generally are unwilling to pay a premium for environmentally friendly products, how is the company deriving business value from its sustainability strategy, or, if not, how can it ensure that it does? Answer: Although Walmart is a cost leader, the customer behavior has not been strictly biased towards lowest cost. For instance, when Walmart introduced organic (green) yoga pants and tees, the products were sold in record time, indicating the customer preference for ‘green’ products as long as they were affordable. However, one could cynically view this as a lucky exception. This is because, as inferred from the case, on many occasions, Walmart’s customers were not informed about the environmental aspects of the products. The reasons for the lack of marketing could be attributed to the following reasons: a. The company was not 100% sure about the environmental safety of the products and went by the suppliers’ word; a product fiasco after publicizing high standards of the products would prove costly for Walmart’s business b. Walmart did not want to cannibalize its existing non-green products for the ‘green’ ones So, is Walmart deriving any value from sustainability? c. One way to derive value from the sustainable business would be to educate the customers about the environmental aspects while also keeping the price affordable. Customers would be willing to buy more sustainable products that are also simultaneously affordable. In order to implement that, Walmart has to introduce sustainability standards for all its suppliers. This is already being taken care of by consortiums like TCS that collect data on the best practices in the industry and help implement the same at the supplier end. The suppliers are incentivized to maintain standards in their self-reporting of sustainability in order to keep their relations with Walmart (the biggest player in retail) in-tact d. 2. Imagine that you are evaluating the progress of the electronics, seafood, and textiles networks. Which networks have been most successful? What factors explain the successes (or lack of successes) of these networks?
Given the fact that Wal-Marts customers generally are unwilling
to pay a premium for environmentally friendly products, how is the
company deriving business value from its sustainability strategy,
or, if not, how can it ensure that it does?Answer:Although Walmart
is a cost leader, the customer behavior has not been strictly
biased towards lowest cost. For instance, when Walmart introduced
organic (green) yoga pants and tees, the products were sold in
record time, indicating the customer preference for green products
as long as they were affordable. However, one could cynically view
this as a lucky exception. This is because, as inferred from the
case, on many occasions, Walmarts customers were not informed about
the environmental aspects of the products. The reasons for the lack
of marketing could be attributed to the following reasons:a. The
company was not 100% sure about the environmental safety of the
products and went by the suppliers word; a product fiasco after
publicizing high standards of the products would prove costly for
Walmarts businessb. Walmart did not want to cannibalize its
existing non-green products for the green onesSo, is Walmart
deriving any value from sustainability?c. One way to derive value
from the sustainable business would be to educate the customers
about the environmental aspects while also keeping the price
affordable. Customers would be willing to buy more sustainable
products that are also simultaneously affordable. In order to
implement that, Walmart has to introduce sustainability standards
for all its suppliers. This is already being taken care of by
consortiums like TCS that collect data on the best practices in the
industry and help implement the same at the supplier end. The
suppliers are incentivized to maintain standards in their
self-reporting of sustainability in order to keep their relations
with Walmart (the biggest player in retail) in-tactd.
2.Imagine that you are evaluating the progress of the
electronics, seafood, and textiles networks.Which networks have
been most successful?What factors explain the successes (or lack of
successes) of these networks?3.How is Wal-Mart motivating its
suppliers to share information about and continuously reduce the
environmental impacts of products and processes?How can the company
stimulate the development of breakthrough innovations?4.Propose one
new game changer or innovation project not described in the case,
for any of the networks.To support your proposal, outline the
environmental benefits, the profit opportunity for Wal-Mart, the
greatest challenges to implementation, and how Wal-Mart could
overcome them.Please be prepared todiscuss your proposal in
class.5. Given its underlying business model and scale, can Walmart
ever truly be sustainable? Why or Why not?Walmart may not be a 100%
sustainable company. Given the scale of its business and its
extensive geographic presence, it may not be possible to maintain
the standards across all locations. For instance in a country like
China, it may be harder to implement green measures and ensure
customer acceptance for slightly higher priced products. The same
reasoning could be true for several locations within the USA too.
Walmart has to cater to different customer needs- the ones who can
afford a lower cost product only and the ones that can afford a
small premium.From an operations standpoint, Walmart can
